Max Steinberg remembers that it was a struggle to get a single busload of investors to come to Liverpool in 1981. He was working for Michael Heseltine, the Conservative minister who took charge of reviving the city after the Toxteth riots. Some Tories talked of abandoning the former imperial powerhouse to "managed decline" and it seemed the business world agreed.

So Steinberg is more than encouraged that, from Monday, "the world is coming to Liverpool". Now chief executive of the city's economic development agency, Liverpool Vision, he has overseen the organisation of Britain's biggest-ever business fair. At least 75,000 people are expected to come to the Liverpool Festival for Business, a seven-week jamboree that the government hopes will trigger £100m of foreign investment over the next decade.

Those executives will find an economic revival that goes far beyond the bustling Albert Dock and the Three Graces, the handsome beaux-arts palaces that line the Mersey riverfront. This autumn, a £350m super-port will open its docks, allowing the world's biggest container ships to bring their wares to Liverpool. After years of wrangling, plans to redevelop Anfield have been approved, with new homes, shops, a hotel and expansion of Liverpool FC's stadium in the pipeline. In the north of the city, old houses are being demolished to make way for a market, as part of another multimillion-pound regeneration plan.

Yet, for many outsiders, Liverpool still conjures up images of mass unemployment and militancy, a hard-luck town that unleashed the creative force of the Beatles. "Brand Liverpool is almost a stronger brand abroad than it is in some parts of the country," Steinberg says. "I am not sure everyone in this country understands the extent to which Liverpool has gone through the kind of renaissance it has gone through, and continues to go through." Perhaps underscoring the depths of incomprehension, the city even opened an "embassy" in London to lure investors north.

Ambassadors of the "kingdom" of Liverpool are especially keen to tell the south about the city's thriving tech scene at the Baltic Triangle, former tobacco warehouses now housing almost 120 start-ups. Lee Omar was one of the Baltic Triangle's first tenants, founding his computer app company Red Ninja there three years ago. He still remembers when trees sprouted in the derelict warehouses while the council debated turning the area into a controlled red-light zone. Now, on a warm summer's evening, tech workers spill out of the bars onto the pavements.

For personal reasons, Omar briefly considered a move to London, but soon abandoned that idea: "I'd see it as a bit of a failure if I had to go there and could not make something work here." His home town's attractions are plenty: the steady stream of bright young graduates from Liverpool's red-brick university, plus the serendipitous encounters with other tech entrepreneurs in the building. Then there is just something about Liverpool. "It is a poor city but within its DNA is trade and pioneering and hustle. There is a culture of innovation and firsts here: the first free doctor, the first public health officer, well before the NHS."

Red Ninja, which has developed tourism and transport apps, is now focusing on health: it has created an internet-shopping app to help less-mobile older people get their groceries. The team spent months working with people aged from 65 to 90, to design something they wanted to use, without fussy icons or endless scrolling.

The buzz around the Baltic Triangle helps explain why the city has seen the private sector expand, despite the harsh recession – around 12,800 private-sector jobs were created in 2010-12, according to the Centre for Cities thinktank.

International Festival for Business 2014 exhibitors Neil & Ian Briggs with their Mono sports car. Photograph: Howard Barlow for the Observer Howard Barlow/Observer

The city's Labour mayor, Joe Anderson, says the council helped create a further 1,700 private-sector jobs in the last nine months, using financial incentives to draw in companies such as Amey and BT, as well as BAC Mono, a British company that has built the world's fastest single-seater sports car. But, he says, without a shadow of a doubt the city could have created even more jobs if it wasn't hamstrung by central government cuts. "[Austerity] has been severe. We have lost 58% of central government funding," he says. "The government have given to us with one hand and they have taken with the other."

He thinks devolution would allow Liverpool and other cities to prosper. "We could help ourselves even more given the tools to do so," says Anderson. For now, he sees a disconnection between the south and the rest of the country, which also helps to explain a surge in support for Scottish independence. "The no campaign is gaining traction because people are disillusioned with the south not even thinking about the whole country, but just thinking about London and the south-east."

The mayor, a former merchant seaman, once criticised Liverpool's year as city of culture in 2008 as a "wine and canapés" affair that excluded the poorest people of the city. The business festival will benefit the whole city, he says. "This is about promoting the whole city region, about investment that will go into places like north Liverpool, south Liverpool and east Liverpool. They won't be left behind."

Kirkdale is only a couple of miles from Liverpool's majestic city centre, but feels like a different city. Cars speed past boarded-up shops, litter lies in the grass verge in a gap where a building has been demolished. Kirkdale always features in surveys of the 1% of most-deprived areas in England, alongside Everton, Garston and other Liverpool wards.

But a garden is taking shape. Local volunteers have planted shrubs and saplings around chessboard paving. The radishes and potatoes in the vegetable patch will eventually end up on plates in the community cafe. The garden, funded by the cosmetics company Jo Malone, opens next month and is part of the Rotunda Community College. Some come to the college to take part in the Shakespeare reading group, or local-history club; others are struggling with mental health problems, low esteem and no qualifications, and are looking for help to get a job. "Coming to Rotunda you will be made to feel your potential before you walk in the door," says chief executive Maxine Ennis.

Kirkdale was been knocked sideways by government cuts. "The bedroom tax has been a devastating blow: people are finding it really difficult to meet their basic needs," says Ennis, who tells of a local "nana" who went to bed without dinner this week. "She was minding her grandchild and the grandchild came first."

It all seems a long way from the deal-making that will take place on the rooftop terrace at the Festival for Business. But Ennis sees the festival as part of bigger changes happening in the city. "The vision that this city has for its economic renewal is without limits; it is without boundaries. And I think it is great and it is about time. But whether that is felt by the lady I have just described is another matter."

For now, the Rotunda has big plans. As well as radishes, the college wants to help enterprise grow. It has recently opened a business centre, offering budding entrepreneurs office space, as well as advice on marketing and accountancy – a potentially significant move in an area where business startups are well below average. Combined with the long-awaited regeneration getting under way, Ennis says things are finally coming good, after years of people being let down. "It makes me feel north Liverpool is just at the point where it is going to fly."

Jim O'Neill: 'It's important to try to showcase what other urban areas in the country can do.' Photograph: Jiri Rezac/eyevine Jiri Rezac/Jiri Rezac / eyevine.

'The north-south divide may never be breached'

"Some days I'm proud of it, others days I find it a pain in the backside. It depends on my mood." Jim O'Neill is talking about "Bric", the acronym he coined in 2001 to describe the shift in economic power from the west to the emerging economies of Brazil, Russia, India and China.

It has followed the former Goldman Sachs chief economist and one-time bidder for his beloved football club, Manchester United, around ever since.

O'Neill left Goldman – where he was latterly chairman of Goldman Sachs Asset Management – last year but says he is just as busy these days, with his office fielding anything up to 10 requests a day for him to speak at various events. The difference now is he gets to pick and choose how he spends his time.

He will be among a line-up of well-known speakers on Monday at a UK Trade & Investment event to mark the opening of the International Festival for Business, which will see Liverpool host a series of events over 50 days.

As a Mancunian in Liverpool, O'Neill will put aside the bitter rivalry between the cities, something he has grown accustomed to doing in his current role as chairman of the City Growth Commissioncorrect.

The idea behind the commission is to explore what boost UK cities would need to try to catch up with the economic might of London. Launched in October 2013 for 12 months only, it will publish recommendations later this year in a bid to spur political debate in the runup to the general election in May 2015.

O'Neill says it is significant that a massive event such as the IFB is being hosted in Liverpool, because it sends a signal. "It's important, as with a number of areas of government policy, [that] you've got to walk the walk as well as talk the talk. And with my commission hat on, it's important to try to showcase what other urban areas in the country can do."

A packed room in London's Art's Club in Mayfair seems a long way from Old Trafford and the industrial north, but that's part of O'Neill's point – he wants those northern towns to have more economic ambition to rival the capital and adopt a new way of thinking.

It was this that led him to the idea of essentially merging the economies of Manchester and Liverpool and creating a "Manpool". Is this his Manchester bias coming, through – why not Liverchester?

He insists he merely borrowed the idea and the term after hearing about it from a hedge-fund contact. "It wasn't me. It's a bit like some of my other acronyms, they get created for me; people just think I've created them."

The idea of bringing together cities with such distinct identities and fierce pride seems ambitious at best and he concedes there would be countless barriers, not least how such a combination would be administered, but says it's more about trying to stimulate bold ideas and different ways of thinking.

"You look at Manchester, Leeds, Liverpool. If all of that urban area could behave as a consumer or producer as one, then you're dealing with something that is vaguely approaching the size of a London."

The same applies to the north-east.

"It's controversial but it seems to me, in an area which is arguably one of the most challenged regions, they have got to start thinking that way. Of course, Newcastle, Sunderland and Middlesbrough are really, really proud areas and one's got to respect that."

But O'Neill concedes that even with the boldest ambition it is difficult to see how the economic divide between the north and the south will ever be breached. "I think it's really difficult. You're fighting decades, if not centuries, of trend. I don't want to use the word impossible but it might be really difficult."